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Baht/$ 33.08/12
Bid/Ask
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GOLD |
13,650
- 250
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Current Phoenix mill at full capacity
NAREERAT WIRIYAPONG
KHON KAEN / Phoenix Pulp and Paper Plc (PPPC), wholly owned by Siam Cement Group (SCG), is studying an investment of six to eight billion baht to raise pulp capacity by 100,000 tonnes to serve rising demand and cash in on exports.
PPPC, Thailand's top pulp producer, has nearly completed construction of its 7.3-billion-baht paper mill. Production is set to start in early July with output of 100,000 tonnes of printing paper up to the end of this year.
By the beginning of 2009, the plant would step up production to a maximum of 200,000 tonnes per year, said managing director Terasak Chamikorn.
The facility will acquire pulp from the PPPC plant that has operated for more than three decades and is now running at full capacity of 240,000 tonnes a year, said Mr Terasak.
About one-quarter or 50,000 tonnes of PPPC's pulp output is currently exported to more than 30 countries including China, Hong Kong and India.
PPPC's short-fibre pulp made of eucalyptus is now trading at almost $800 per tonne, up from $720 at the beginning of this year. The price is still on an upward trend, said Mr Terasak.
He said that once the paper mill was in operation, it would require all of the current pulp production and the company would not have pulp left for the export. Therefore, PPPC needs to increase pulp production capacity, scheduled to become available in 2010.
''We want to maintain our exports. Currently pulp prices are very good and have kept increasing over the past two years,'' said Mr Terasak.
The company expects to double its annual revenue to eight billion baht when its paper mill is fully operational next year.
This year, it expects revenue to approach five billion baht, up from four billion last year, thanks for the increase in domestic demand and rising pulp prices.
Around 70% of PPPC's paper capacity is for local demand with the rest for export.
Printing paper prices are currently around $850-900 per tonne, driven up by high oil prices. PPPC itself says its energy cost has risen five-fold due to the sharp increase in oil and coal prices.
PPPC expects domestic demand for printing paper to rise by double digits this year from about 600,000 tonnes in 2007. The market is still only at half of the peak seen before the 1997 financial crisis, said Mr Terasak.
He said Thailand's annual paper consumption of 20 kilogrammes per capita was still very low, compared to more than 100 kg in Singapore and Hong Kong, and more than 200 kg in Japan.
Apart from PPPC, SCG also operates other two pulp factories in Ratchaburi and Kanchanaburi with a combined capacity of 240,000 tonnes per year.
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